HomeMy WebLinkAbout08/04/1992, 4 - CONSIDERATION OF POLICY OPTIONS REGARDING REGIONAL HOUSING NEEDS FOR SAN LUIS OBISPO. y�. uriglnal Agenda report from the meeting of 7/7/92 .
iIIII�INII��IIIIIIIIIII�II�IN � MEETING GATE:
N� cityo Sark aIS OBispo
COUNCIL AGENDA REPORT ITEM NUMBER:V
a
FROM: rnold Jonas, Community Development Director; By: Jeff
Hoo sociate Plan er
SIIBJECT: Consideration of policy options regarding regional
housing needs for San Luis Obispo.
CAO RECOMMENDATION: Evaluate the regional housing need policy
options and by motion, provide direction to staff regarding the
preferred policy to incorporate into the City' s draft housing
element update.
REPORT-IN-BRIEF
The City is at a "crossroads" in the preparation of its draft
housing element update. The Planning Commission has completed its
review, and recommended changes to the element to reflect the 1
percent growth policy incorporated into both the current and draft
update land use elements. This recommendation conflicts with state
requirements that the City meet "regional housing needs" in its
housing element. Compliance with this requirement is necessary to
assure state acceptance of the draft housing element as being in
compliance with state law. The report concludes that the
Commission's recommendation and the State 's requirements cannot be
reconciled, and that the City Council should provide direction as
to the preferred growth strategy. This approach would then be
included in the City Council hearing draft of the housing element.
SITUATION
I
At its May 13, 1992 meeting, the Planning Commission completed its
review of the Draft Housing Element update and directed staff to
revise the draft prior to City Council review. Most of the
Commission's comments were on the housing policy and program
details and implementation. The Commission's most significant
revision dealt with the City' s response to "regional housing need"
as determined by the San Luis Obispo Area Coordinating Council
(COG) . Commissioners felt that COG' s housing need allocation was
unrealistic, and that the updated housing element should reflect
the City's current growth management policy -- allowing a 1 percent
increase (about 180 dwellings) in the housing stock per year. This
policy direction is not consistent with State-approved regional
housing needs, and may conflict with state housing law.
Before the Commission's changes are incorporated into a City
Council hearing draft, and with the Commission's understanding and
agreement, staff is asking the Council to provide policy direction
on how to reconcile state regional housing need requirements with
City growth policies. This report discusses the regional housing
need issue and presents policy options for Council consideration.
HCD staff will review the draft element for compliance with State
law, and return its comments in 45 days.
I�III�I�Ill�llllln�� II V7 MEETING DATE:
c� o san IL � ogispo
COUNCIL AGENDA REPORT ITEM NUMBER:
Regional Housing Need
Page 2
Once the Council identifies its policy preference, the City Council
hearing draft housing element will be prepared and scheduled for
Council hearings, and forwarded to the California Department of
Housing and Community Development (HCD) for their mandatory review
prior to Council action.
Regional Housing Need
Like many California communities, San Luis Obispo is required to
update its adopted Housing Element regularly (status report on
other Central Coast cities attached) . As part of the updating
process, state law requires local governments to incorporate
specific housing production targets -- called "regional housing
need" -- into their housing elements. Regional councils of
government are delegated the authority to determine regional
housing needs for each city and county following state guidelines.
HCD then reviews and approves the regional housing needs plans to
determine compliance with state housing goals.
On November 6, 1991, COG adopted a Regional Housing Plan calling
for the construction of 19,880 new housing units in San Luis Obispo
County by July 1997, a 22 percent increase in the number of
existing units. Based on the methodology used, San Luis Obispo
City is charged with providing 5, 128 new units by July 1997 , a 26
percent increase in the City's housing stock -- and over one
quarter of the County's total projected housing need.
After careful review, staff determined that the allocation for San
Luis Obispo is based on inaccurate assumptions about City/County
economic trends and population growth. Using methods similar to
those used by COG and the State, and using what staff feels are
more appropriate growth trends, city staff estimated that the City
of San Luis Obispo's would need approximately 3 ,700 new housing
units by July 1997 to meet both city and regional housing needs.
The City's Housing Element update includes new policies and
programs to expand the City's affordable housing supply. To put
the Area Coordinating Council ' s numbers in perspective, however,
the City would need to allow the construction of about 1, 000
dwelling units annually for the next five years to meet the adopted
target. The City has never achieved this rate of housing
construction --not even when housing construction has been most
active. We reached a peak during the mid-1980s of about 800 units
in one year.
y,�2
Illu^ly�ll�llllll��ll Il�ll�l�l city o sar. AS OBIsp� MEETING DATE:
IIIItl II�NIIIII ITEM NUMBER:
COUNCIL AGENDA REPORT
Regional Housing Need
Page 3
Previous "Fair Share" Requirement
This isn't the first time San Luis Obispo has addressed state-
mandated housing targets. In 1984, HCD prepared a "housing needs
plan" for San Luis Obispo County and all the cities within the
County. During the 1987 housing element update, HCD required San
Luis Obispo to include a regional housing need allocation of 1, 630
new dwellings between 1984 and 1990. During this period, the City
gained new 2, 690 dwellings -- substantially more than the HCD' s
regional housing need figure. The element's target numbers for new
dwellings for low and very low income households, however, were not
achieved.
State Housing Law Changes
In 1990, then Governor Deukmejian signed into law SB 2274
(Bergeson) . In effect, this law put "teeth" into the State's
regional housing need requirement by revising the process of
allocating local shares of regional housing need, and by requiring
that HCD review housing elements to assure compliance with state-
mandated housing needs prior to adoption (State Housing Law
attached) . Now under state law, local governments no longer had
the right to adopt a "local revision" to its regional need
allocation. Instead, cities and counties could propose revisions
to COG. The "catch" : if COG accepts the revision, it must ensure
that the total regional housing need remains the same. Locally,
that would mean that the portion of regional housing needs assigned
to but not accepted by San Luis Obispo City must then be allocated
to some other jurisdiction in the County.
According to planning directors of the various cities in the
County, these cities may be unable to meet their regional need
allocation, and they are not willing to accept a portion of the
City's allocated need. The County is in a similar position.
COG' s Action
State law requires HCD to determine the regional housing needs for
each COG jurisdiction, in this case, the County of San Luis Obispo.
Using population growth estimates prepared by the California
Department of Finance, HCD determined San Luis Obispo County's
regional housing need and notified the County in June 1990. COG
staff attempted to lower the State's growth estimates, citing
resource constraints to growth due to sewer and water. In March
1991, HCD agreed to lower its population growth estimates -- mainly
in response to newly released 1990 Census data.
�3
Sm IN
ci4��N�III���IIIIIIIIIIIII,Ilulll t1 o f san tMEETING DATE:
il►►�u►I �..� oBispo
COUNCIL AGENDA REPORT ITEM NUMBER
Regional Housing Need
Page 4
Originally, HCD estimated that the County's total population would
increase from 221, 703 to 281, 100 persons between January 1, 1990
and July 1, 1997 -- an average annual increase of 3 . 6 percent. The
revised, final estimate is for the County's population to grow from
221, 703 to 267, 600 persons between April 1, 1990 and July 1, 1997 -
- an average annual increase of 3 .2 percent.
City Appeal of Regional Housing Needs
In August 1991, City staff reviewed COG' s determination and
concluded that it did not accurately reflect the City's housing
need or capability to support additional growth. In September
1991, the Planning Commission discussed the regional housing need
issue, and supported staff's contention that COG' s numbers were not
achievable. Commissioners directed staff to prepare an appeal of
COG's determination as part of the housing element update work.
In January 1992, the Commission reviewed staff 's proposed revision
to COG's determination, and concurred with the approach.
The appeal was submitted to COG staff in January, including an
analysis of COG's numbers and methods on which the needs assessment
is based. COG's regional housing need determination was based
primarily on employment growth projections and availability of
water resources. On April 8, 1992 COG denied the City' s appeal,
finding that the City' s proposed revision was not justified
because: 1) the regional housing needs were developed following
state law and accepted planning methods; 2) if employment
projections on which the regional needs are based were not
achieved, the City still has unmet need for housing for existing
local employees; and 3) the City's revision would require
reallocating the difference in housing need to other jurisdictions
in the County, and evidence indicates that these jurisdictions are
not able to accommodate the additional housing.
The main factors that COG used to determine the City' s regional
housing need are summarized below.
Employment Growth
The 1980s were years of rapid growth for much of San Luis Obispo
County. According to COG figures, San Luis Obispo and surrounding
areas showed a 28 percent increase in the number of jobs between
1980 and 1987. As noted in COG's study, one-half of the County's
jobs were in San Luis Obispo City. To arrive at housing need
figures, COG's plan assumes that a robust 18 percent 'rate of job
growth will prevail through the planning period.
�T
Illll�ly�lll�lllllll�.l�ll� VJ MEETING DATE:
c� o sar. pis o�ispo
COUNCIL AGENDA REPORT ITEM NUMBER:
Regional Housing Need
Page 5
The rate of job growth in the "central county" area during the
1990s is likely to be much less than the 28 percent experienced
during the economic boom days of the 1980s. These job growth
figures included large employment generators which are not likely
to continue, at least in the foreseeable future, such as
construction of P.G. & E. 's Diablo Canyon nuclear power plant,
major enrollment and facility expansions at Cal Poly and Cuesta
College, and growth in State and County employment. The Diablo
Canyon facility is built out, and enrollment at Cal Poly and Cuesta
College have stabilized, and will probably decline due to budget
constraints. A lack of water, coupled with recessionary economic
factors state wide are likely to dampen public and private sector
employment growth for the period covered by this plan.
The plan notes that "San Luis Obispo' s role as a regional
employment center is expected to continue, although employment
growth is expected to be deflected to other communities due to
water and sewage disposal service limitations in San Luis Obispo. "
Between January 1989 and January 1990, job growth in SLO County
dropped to about 1 percent. According to State Employment
Development Department (EDD) staff, that employment growth rate is
expected to last at least through 1992 . Yet COG' s plan assumes an
overall job growth rate of 18 percent between January 1991 and July
1997, (based on a 1990 estimate of 37, 317 jobs in the "central
county" area) , despite reduced economic expectations for the early
1990s. Based on EDD data and economic trends, a more realistic
estimate of 10 percent overall job growth should be used for the
planning period.
Revised calculations for additional housing need based on
employment trends are:
10% job growth from 1/1/91 through 7/1/97 equals 0. 10 (37, 371)
= 3 , 332 new jobs;
substituting,
3 , 332 new jobs/ (1.2 employed person per household x 0.95
occupancy rate) = 2 ,923 new dwellings.
The city's average number of employed persons per household is 1.21
not 1.1 as used in COG's analysis. Hence, the base housing need
for the City of San Luis Obispo (January 1991 through July 1997)
should equal about 2,923 housing units. To allow for housing
demolitions and conversions and a 5 percent vacancy rate, this
figure is increased by 8 percent to an adjusted need of 3,282 new
housing units by July 1997.
VIII^IYIIII�IIIIIII�I II � MEETING DATE:
city o san li...� oBtspo
COUNCIL AGENDA REPORT ITEM NUMBER:
Regional Housing Need
Page 6
Water Resources
Since COG prepared its housing need estimates, the time frame for
development of new City water sources has changed. COG assumed
that the Salinas Reservoir expansion would provide 1, 350 acre feet
in January 1994, Nacimiento Reservoir water in 1995, and State
Water Project coastal branch water would be available in 1996. Due
to the actual time needed for engineering and environmental
studies, design and construction, the earliest any of these new
sources will be available, optimistically, is July 1995 (Salinas
Reservoir) , at least 1 1/2 years later than anticipated.
COG assumes 4,400 new units could be served with water during the
planning period; however using the most accurate estimates
available, the most dwelling units which could be served based on
anticipated water supplies between 1992 and July 1997 is 2,900
units.
According to state law, availability of public services like water,
sewers, police and fire services limits growth only in terms of
timing. Thus, the regional housing allocation plan can consider
the time needed to provide the necessary services to support growth
in setting housing allocations. The law does not allow cities and
counties to set permanent growth limits based on limited water or
sewer facilities.
summary
Using COG' s methods and substituting more realistic assumptions
about demand, job growth, available land, and public services, the
City's base share of regional housing need is 1, 170 to 2 , 923 new
housing units between January 1991 and July 1997. To allow for a
5 percent vacancy factor and demolitions, an additional 234
dwelling units is added to the base housing need, for a total need
of 3 , 282 new housing units.
For reasons cited above, COG's total projected housing need for SLO
County is lower than that projected by the State Department of
Housing and Community Development. So a portion of the difference
between COG's projected regional need and the State's projected
need was allocated to each city and to the unincorporated area
based on the amount of growth forecast for each. So to be
consistent with COG's method, the City' s regional need allocation
was adjusted accordingly:
3,282 units (projected City need) + 451 units (HCD added need)
revised regional housing need of 3,733 dwelling units. /
IuII�I�II�uIIIIIIIIIII�II�IINr MEETING DATE:
�pinu�I ci o sar, .pis os�spo
COUNCIL AGENDA REPORT ITEM NUMBER:
Regional Housing Need
Page 7
To produce enough housing to meet this revised need, the City would
need to accommodate 575 new dwellings per year between January 1,
1991 and July 1, 1997. Even if the City did tailor its policies
and programs to allow this rate of housing production, it still
might not be achieved. It could be achieved only if:
■ City water supply improvements proceed as planned, and
necessary public services (water, sewers, roads, schools) are
available to meet the needs of current residents plus those
of new residents;
■ the City receives development applications proposing at least
this number of new housing units;
■ - City policies. are amended to allow growth to exceed the 1
percent level identified in the General Plan and proposed Land
Use Element update; and
■ the City annexes land within its urban reserve to allow room
to accommodate this level of residential growth.
Consequences of Not Meeting Regional Housing Needs
State law requires the City to include policies and programs in its
Housing Element which would allow the City to achieve its regional
housing need, but it does not hold the City • responsible for
actually producing this housing. If the City makes a "good faith"
effort to allow this much housing and provide the necessary
policies, programs, properly zoned land, and resources but the
housing is not built, it would be deemed to be in compliance with
state housing law, according to HCD officials. For example, if the
City is not able to secure additional water during the planning
period from 1992 to 1997 , HCD would recognize that situation as a
legitimate reason for not achieving COG's regional housing need.
There is, however, a likelihood that the state will try to "carry
forward" the unmet housing need into the City's future housing
programs.
If the City does not reflect COG' s regional housing need numbers
in the pending Housing and Land Use Element updates, it is likely
that HCD will find the City's Housing Element to be not in
compliance with state housing law (Article 10. 6. , Ch. 65580
et.seq. , Calif. Govt. Code) , according to Gary Collord, State
Department of Housing and Community Development (June 10, 1992) .
This action has at least two possible ramifications:
1) As a result of developer or citizen legal action, the adequacy r�
IIIII^I�III�IIIIIII�I III vMEETING DATE:
pulll�� C� J of San l�_J OB�SpO ITEM NUMBER:
COUNCIL AGENDA REPORT
Regional Housing Need
Page 8
of the City's General Plan could be challenged. Courts have
restricted cities' ability to issue construction permits where
it's been determined that their general plans were invalid.
2) The City's eligibility to compete for and receive housing
grants through HCD would be reduced. This should not,
however, affect the City's eligibility to receive federal
housing block grants for which the City is now entitled due
to its recent classification as an "urbanized area. "
POLICY ALTERNATIVES
The City of San Luis Obispo does not actually construct dwellings.
However, through its provision of services, zoning regulations and
growth management programs, it influences housing production. By
establishing housing goals, the City is stating that it will enable
housing construction to occur at established rates.
Staff has identified three policy alternatives for dealing with the
conflict between city policy and state-mandated housing needs.
Only alternative 1 would meet the State's requirements.
1. COG's Allocation: Set housing production goals consistent
with the City's regional housing need as determined by COG and
approved by the State.
2. Moderate Growth: Set housing production goals which are lower
than COG's regional housing need, and linked to the
availability of public services and moderate economic growth
expectations.
3. Continued 1% Growth Limit: Set housing element goals and
policies based on the General Plan' s 1 percent.
Table 1 on the following page compares the housing rates and
construction levels associated with the three policy options
described above.
POLICY OPTION 1: COG' s Allocation
Description: The City would incorporate into its housing element
the housing goals prepared by the San Luis Obispo Council of
Governments and approved by HCD. The City would enable the
construction of an average of 789 dwellings per year between
January 1991 and July 1997 .
—O
Illll�l�►►I�IIIIIIIII 1� "J o sar. ais oBispo MEETING DATE:
►�►���� c�
COUNCIL AGENDA REPORT ITEM NUMBER:
Regional Housing Need
Page 9
1. Consistency With the General Plan
This policy option conflicts with the current and proposed Land Use
Elements because it would allow annual average growth rates to
reach 4 .3 percent, while the General Plan limits the annual growth
rate to 1% or less. The 1 percent growth rate is not linked to any
specific resource or service limitation, but reflects previous
Council judgements about a sustainable growth rate which allows the
orderly provision of facilities and services for new development,
and the assimilation of new residents and physical changes into the
community. In terms of the City's ultimate size, however, this
approach is consistent with the draft land use element. This
document anticipates the addition of about 5, 100 new units between
1992 and 2017. In effect, by meeting COG's regional housing need,
the City would reach its ultimate size as much as 20 years sooner
than anticipated.
Table 1
Alternative Policies for Meeting Regional Housing Needs
(Units Produced, January 1991 - July 1997)
Policy Options Total Units Units/Year
COG Allocation 5, 128 789
Moderate Growth (1) 31733 575
General Plan (2) 11290 184
(1% Annual Rate)
Production History 2 , 809 468
(1984 - 1990)
Notes:
(1) This policy option was incorporated into the dr aft
Housing Element considered by the Planning Commission i
May, 1992 .
(2) The Planning Commission has recommended that the Cit
target its housing goals to be consistent with the an
Use Element of the General Plan (1% annual growth rate) .
Illu^I��II�IIIIII�I�I�IIIIII� v3 MEETING DATE:
IIII I��u�� city o san l�..s oB�spo
Olin COUNCIL AGENDA REPORT ITEM NUMBER:
Regional Housing Need
Page 10
2. Resource/service availability and environmental impact
The proposed regional housing need for the City of 5, 128 new
dwellings between January 1991 and July 1997 is not achievable
because adequate water and sewer resources are not available during
the planning period to support this rate of growth, and because the
increased population in so short a time span would result in
significant, unmitigatable impacts to traffic, air quality, police
and fire services, and schools. The City' s draft Land Use Element
indicates that 5, 100 new dwellings will be added gradually at about
200 units per year between 1992 and 2017 , accommodating a total
City population of about 55, 000 persons.
Air Quality
The levels for ozone and particulate matter in this area currently
exceed acceptable standards, and emissions of these pollutants must
be reduced by 5% per year until State standards are achieved.
Adding 5, 128 dwellings will significantly increase traffic levels
and mobile emissions, and delay if not preclude the City's
attainment of State air quality standards and compliance with the
1988 Clean Air Act.
Traffic
The draft Circulation Element proposes various programs and traffic
improvements during the next 30 years and assumes that in-city
traffic volumes will increase at an average rate of slightly over
1 percent per year. If the City population grows faster than 1
percent per year, planned traffic improvements may not be adequate
to maintain safe, efficient traffic flow during peak hours. To
meet the regional housing need, the City would produce new housing
at an average rate of about six percent per year between July 1992
and July 1997 .
Police and Fire Services
As the City's population grows, the need for police and fire
services grows at a disproportionately faster rate. Police
staffing in San Luis Obispo is already below the state average, as
measured by the number of sworn officers to resident population.
Currently, the City's ratio of sworn officers to population is 1. 33
per 1, 000 resident population, below the state average of 1. 8 per
11000. The increased need for staff, equipment, and facilities
will be met partially through development impact fees and
environmental impact mitigation fees imposed at the time of future
development. Added costs for these services will, in part, be paid
IIIryAI�IIII�IIIIIIIII II V' MEETING DATE:
city o sar. .��s OBISPO
COUNCIL AGENDA REPORT ITEM NUMBER
Regional Housing Need
Page 11
by city residents through increased fees or taxes.
Sever
Sewer treatment plant upgrades now underway will expand the City's
sewer treatment capacity to about 5.4 million gallons per day
(average dry weather flow) , or five percent. This will accommodate
a population increase of 4, 300 persons through the year 2000
(Wastewater Treatment Plant Final EIR, March 1990) . The plant will
be operational by Fall 1992 , and is planned to accommodate an
increase of up to 3 , 000 persons, or about 1250 new dwellings by
1997 .
Water
Engineering and environmental studies are underway to secure
additional water supplies. At the earliest, additional water
supplies are not expected to be available to support new
development until 1995 with the enlargement of the Salinas
Reservoir. This project is expected to add about 1, 600 acre feet
for residential use. At a use rate of 0. 43 acre foot per dwelling
per year, this could support development of 3 , 700 new dwellings.
Between July 1992 and January 1995, housing growth would be limited
by lack of water to the rate of development which could be
accommodated by retrofitting, or probably somewhat less than 1
percent per year (180 to 200 dwellings per year, compounded) . If
the City were successful in securing all of the additional water
sources under consideration, it could make available up to 5,970
acre feet of water to meet the needs of new residents -- enough for
about 13 , 000 new dwellings.
Timing is the main water constraint in achieving the COG's numbers.
Beginning in January 1995, housing production could increase;
however, to meet the City's regional housing need of 5, 100
dwellings by July 1997, 4,443 dwellings would have to be built in
two and one-half years -- a rate of almost 1500 units per year or
148 dwellings per month. The City has never achieved this rate of
growth, nor is it likely that this rate could be achieved even if
the environmental impacts could be mitigated, and the resources and
policies were in place to allow such growth.
Schools
San Luis Coastal Unified School District's current enrollment is
7,800 (includes eight schools outside SLO City) . According to
District studies, new residential development generates 0. 65
/l
I`lu^I�III��IIIII�III 1� � MEETING DATE:
c� o san 1�..� OBISPO
COUNCIL AGENDA REPORT ITEM NUMBER:
Regional Housing Need
Page 12
schoolchild per dwelling. COG's regional housing need translates
into about 3 , 300 added students in five years -- an increase of
about 600 students per year and an increase of over 40 percent in
local school enrollment (50 percent or more in SLO City) . In
recent years, the District has grown at about 80 students per year.
Due to budget constraints and current overcrowding at the
elementary school level, 5, 100 new dwellings would have serious
adverse consequences for school staffing, facilities, and programs
in the City alone, not counting additional problems due to
enrollment growth in areas outside the City also served by the
District.
3. Availability of Land Resources
The City currently has enough land within its boundaries to allow
construction of about 1700 additional dwellings (includes added
development potential from mixed use sites, redevelopment and
intensification) . when expansion areas listed in the draft land
use element are included, an additional 3 , 245 dwellings could be
accommodated, for a total added residential capacity of 4 ,950
dwellings -- less than COG' s need figure of 5, 128 dwellings.
To increase residential capacity, the City would need to consider
additional residential annexations, probably near the City' s
western and southern edges.
4. Impact on Community Expectations
This growth increase would represent a major departure from citizen
preferences on community growth, as expressed in the Land Use
Element opinion survey and recent advisory elections. Although it
is unlikely that this number of new units would actually be built,
the policy change itself would probably not be consistent with the
majority of citizens' views as to San Luis Obispo ' s planned growth
character.
5. Economic Impact
City costs to provide additional services should be partially
offset through permit and user fees, added local sales tax
revenues, and other revenues. Generally, housing (unlike retail
commercial uses, for example) tends to cost local governments more
to provide services than it generates in taxes and fees. Hence,
this rate of residential growth is likely to have an adverse fiscal
impact on the City. The increased rate of housing construction
could be expected to hold city housing costs down and increase
vacancy rates, thus assisting low and moderate-income homebuyers
who wish to live in San Luis Obispo.
ciI�I��lyllll�lll�llllll�ll�lll v1 o sar, _ ais oBispo
MEETING DATE:
COUNCIL AGENDA REPORT ITEM NUMBER:
Regional Housing Need
Page 13
6. Potential For Litigation
This approach would allow the City to meet state housing laws, and
reduce the risk of litigation over the validity of the City's
general plan due to lack of HCD acceptance of the Housing Element.
There may be some risk, however, of developers using litigation to
force the City to allow residential development to achieve this
number of new units even if water were not available to serve the
new residents.
POLICY OPTION 2 : Moderate Growth
This approach would set a growth rate intermediate between COG's
numbers and the City's current and planned 1 percent growth limit
during the 1990s. It would set the City's regional housing need at
3 ,733 dwellings, and would allow an average annual growth rate of
up to 570 units per year, or 3 . 2 percent. By comparison, the
City's annual average housing production during the period from
1984 to 1990 was about 470 units per year, or between 2 . 5 and 3
percent. This is the approach which the current draft housing
element incorporates.
1. Consistency With the General Plan
This option would conflict with the current and proposed Land Use
Elements because it would allow annual average growth rates
slightly exceeding 3 percent, while the General Plan limits the
annual growth rate to 1 percent or less. At this rate, it is
estimated that the City would achieve buildout about ten years
sooner than anticipated.
2. Resource/service availability and environmental impact
The revised regional housing need of 3 , 733 new dwellings between
January 1991 and July 1997 is achievable if the planned water and
sewer facilities are completed and available during the planning
period. ;For example, Utilities Department staff anticipate that
the Salinas Reservoir Expansion would be completed by the end of
1995. Once completed, the modified reservoir would allow storage
to supply an additional 1,'600 acre feet for new housing. This
would be enough to accommodate about 3,700 new dwellings. However
since the additional water supplies will not be available until the
end of 1995 at the earliest, it is not likely that even the revised
housing need could be achieved by July 1997. Environmental impacts
of this option would be similar to, but less severe than those
listed for Option 1. Since the impacts of growth are spread over
a longer time period than in Option 1, their short-term effects are
IIIII�IIIII�IIIII���I jIIIIII� "J 1 MEETING DATE:
I��uil c� o san Lu-,o os�spo
COUNCIL AGENDA REPORT ITEM NUMBER:
Regional Housing Need
Page 14
more easily mitigated and absorbed by the community.
3. Impact on Community Expectations
Like Option 1, this represents a departure from city policies and
citizen preferences on community growth. Although it is unlikely
that even this revised number of new units would actually be built,
and the growth rate would be less "dramatic" than with Option 1,
the policy change itself would probably not be consistent with the
majority of citizens' views as to San Luis Obispo' s planned growth
character. Those wishing to buy housing in San Luis Obispo would
find a wider range of housing types and prices available under this
approach than would otherwise be likely if the City maintained its
one percent growth rate.
4. Potential For Litigation
According to HCD officials, this approach would not meet state
housing law, even though the City might be "procedurally in
compliance" by following all other state requirements for housing
elements. In short, the City must include the COG numbers, or the
housing element will not be accepted by HCD to be "in compliance"
with state housing law. What does this mean? Again, according to
HCD's own staff, it doesn't mean alot. San Luis Obispo's current
housing element has been certified to be in compliance; however of
the 509 California cities and counties required to have housing
elements, only 107 localities had adopted housing elements which
HCD found to be in substantial compliance with housing element law.
Cities and counties who do not comply with state housing law are
at somewhat of a disadvantage when vying for highly competitive
state housing grants. Otherwise, there are currently no penalties
or enforcement tools available to the state to force cities and
counties to comply with housing law. There have been only a few
instances of California cities being sued by third parties (ie.
developers) for not having a certified housing element, and
according to State officials, in those instances the cities
prevailed.
POLICY OPTION 3: General Plan (1 percent growth limit)
Under this option, the City would accommodate construction of up
to about 180 dwellings per year. This is the City's current policy
and it would continue under policies now contained in the draft
land use element. This is the Planning Commission' s recommended
option. The City has already planned to accommodate this rate of
growth through its General Plan, so resources and urban services
Il�hll� ll�ll`IIIIIII�IIIIIII city (� MEETING GATE:
u►� u c� ol" sar .pis oBispo
In goCOUNCIL AGENDA REPORT ITEM NUMBER:
Regional Housing Need .
Page 15
are not expected to prevent the City from achieving this rate of
housing production. Environmental impacts are being addressed as
part of the current land use element update; however staff does not
anticipate significant, unmitigatable adverse impacts resulting
from this growth rate. By holding to the one percent growth rate,
the City's ability to promote a range of housing types and prices
is limited more than under Options 1 and 2 .
Staff's Recommended Policy Approach
Staff supports the Planning Commission's recommendation to maintain
the 1 percent growth rate; however staff supports additional
provisions to exempt affordable housing (which meets city
affordability standards) from the 1 percent limit. This would
allow additional flexibility to meet a demonstrated need for
affordable housing in San Luis Obispo, while holding the
community's overall growth rate to levels anticipated by the
General Plan. The draft Housing Element would need to address the
details of how this exception to growth limits would be
implemented.
C. ALTERNATIVES
In addition to the three policy alternatives above, the City
Council could:
1. Further revise the regional housing need figure downward to
reflect changing employment projections in the San Luis Obispo
area. This would probably result in an annual average growth
rate of between 1 and 2 . 5 percent. Although this approach
still wouldn't meet state law, it would allow the production
of more housing than would otherwise be possible, and come
closer to meeting regional housing needs.
2. Consider revising growth management and land use policies to
exempt below-market priced housing from any growth management
regulations.
RECOMMENDATION
Evaluate the regional housing need policy options and by motion,
provide direction to staff regarding the preferred policy to
address regional housing need, and direct staff to incorporate this
policy approach into the draft housing element.
Attachments: State Housing Law, status of housing element
updates, selected cities.
HOUSING ELEMENT LAW
(As of January 1,1991)
Article 10.6. Housing Elements
65580. The Legislature finds and declares as follows:
(a) The availability of housing is of vital statewide
importance, and the early attainment of decent housing
and a suitable living environment for every California
family is a priority of the highest order.
.(b) The early attainment of this goal requires the
cooperative participation of government and the private
sector in an effort to expand housing opportunities and
accommodate the housing needs of Californians of all
economic levels.
(c) The provision of housing affordable to low-and
moderate-income households requires the cooperation of
all levels of government.
(d) Local and state governments have a responsibility
to use the powers vested in them to facilitate the
improvement and development of housing to make adequate
provision for the housing needs of all economic segments
of the community.
(e) The Legislature recognizes that in carrying out
this responsibility, each local government also has the
responsibility to consider economic, environmental, and
fiscal factors and community goals set forth in the
general plan and to cooperate with other local
governments and the state in addressing regional housing
needs.
(Added by Stats. 1980, Ch. 1143. )
65581. It is the intent of the Legislature in enacting
this article:
(a) To assure that counties and cities recognize their
responsibilities in contributing to the attainment of the
state housing goal.
(b) To assure that counties and cities will prepare and
implement housing elements which, along with federal and
state programs, will move toward attainment of the state
housing goal.
(c) To recognize that each locality is best capable of
determining what efforts are required by it to contribute
to the attainment of the state housing goal, provided
such a determination is compatible with the state housing
goal and regional housing needs.
(d) To ensure that each local government cooperates,-
with other local governments in order to address regional
housing needs.
(Added by Stats. 1980, Ch. 1143. )
1
l' ZI
65582. As used in this article:
(a) "Community, " "locality , " "local government, " or
"jurisdiction, " means a city, city and county, or county.
(b) "Council of governments" means a single or
multicounty council created by a ioint powers agreement
pursuant to Chapter 5 (commencing with Section 6500) of
Division 1 of Title 1.
u "Department" means the Department of Housing and
Community Development.
u "Housing element" or "element" means the housing
element of the community's general plan, as required
pursuant to this article and subdivision (c) of Section
65302.
(e) "Low- and moderate-income households" means persons
and families of low or moderate incomes as defined by
section 50093 of the Health and Safety Code.
(Added by Stats. 1980, Ch. 1143 . , Amended by Stats.
1989, Ch. 1140. Amended by Stats. 1990, Ch. 1441. )
65583. The housing element shall consist of an
identification and analysis of existing and projected
housing needs and a statement of goals, policies,
quantified objectives, and scheduled programs for the
preservation, improvement, and development of housing.
The housing element shall identify adequate sites for
housing, including rental housing, factory-built housing,
and mobilehomes, and shall make adequate provision for
the existing and projected needs of all economic segments
of the community. The element shall contain all of the
following:
(a) An assessment of. housing needs and an inventory of
resources and constraints relevant to the meeting of
these needs. The assessment and inventory shall include
the following:
(1) Analysis of population and employment trends and
documentation of projections and a quantification of the
locality's existing and projected housing needs for all
income levels. These existing and projected needs shall
include the locality's share of the regional housing need
in accordance with Section 65584.
(2) Analysis and documentation of household
characteristics, including level of payment compared to
ability to pay, housing characteristics, including
overcrowding, and housing stock condition.
(3) An inventory of land suitable for residential
development, including vacant sites and sites having
potential for redevelopment, an analysis of the
relationship of zoning and public facilities and services
to these sites.
(4) Analysis of potential and actual governmental
constraints upon the maintenance, improvement, or
development of housing for all income levels, including
2
land use controls, building codes and their enforcement,
site improvements, fees and other exactions required of
developers, and local processing and permit procedures.
(5) Analysis of potential and actual nongovernmental
constraints upon the maintenance, improvement, or
development of housing for all income levels, including
the availability of financing, the price of land, and the
cost of construction.
(6) Analysis of any special housing needs, such as
those of the handicapped, elderly, large families,
farmworkers, families with female heads of households,
and families and persons in need of emergency shelter.
(7) Analysis of opportunities for energy conservation
with respect to residential development.
(8) An analysis of existing assisted housing
developments that are eligible to change to non-low-
income housing uses during the next 10 years due to
termination of subsidy contracts, mortgage prepayment, or
expiration of use restrictions. "Assisted housing
developments, " for the purpose of this section shall mean
multifamily rental housing that receives government
assistance under federal programs listed in subdivision
(a) of section 65863.10; state and local multifamily
revenue bond .programs, local redevelopment programs, the
federal Community Development Block Grant Program, or
local in-lieu fees. "Assisted housing developments" shall
also include multifamily rental units that were developed
pursuant to local inclusionary housing program or used to
qualify for a density bonus pursuant to section 65916.
(A) The analysis shall include a listing of each
development by project name and address, the type of
governmental unit assistance received, the earliest
possible date of change from low-income use and the total
number of elderly and nonelderly units that could be lost
from the locality's low-income housing stock in each year
during the 10-year period. For purposes of state and
federally funded projects, the analysis required by this
subparagraph need only contain information available on
a statewide basis
(B) The analysis shall estimate the total cost of
producing new rental housing that is comparable in size
and rent levels, to replace the units that could change
from low-income use, and an estimated cost of preserving
the assisted housing developments. This cost analysis
for replacement housing may be done aggregately for each
five-year period and does not have to contain a project
by project cost estimate.
(C) The analysis shall identify public and private
nonprofit corporations known to the local government
which have legal and managerial capacity to acquire and
manage these housing developments.
(D) The analysis shall identify and consider the use of
3
all federal, state, and local financing and subsidy
programs which can be used to preserve, for lower income
households, the assisted housing developments, identified
in this paragraph, including, but not limited to, federal
Community Development Block Grant Program funds, tax
increment funds received by a redevelopment agency of the
community, and administrative fees received by a housing
authority operating within the community. In considering
the use of these financing and subsidy programs, the
analysis shall identify the amounts of funds under each
available program which have not been legally obligated
for other purposes and which could be available for use
in preserving assisted housing developments.
(b) A statement of the community's goals, quantified
objectives, and policies relative to the maintenance,
preservation, improvement, and development of housing.
It is recognized that the total housing needs
identified pursuant to subdivision (a) may exceed
available resources and the community's ability to
satisfy this need within the content of the general plan
requirements outlined in Article 5 (commencing with
Section . 65300) . Under these circumstances, the
quantified objectives need not be identical to the
identified existing housing needs, but should establish
the maximum number of housing units that can be
constructed , rehabilitated, and conserved over a five-
year time frame.
(c) A program which sets forth a five-year schedule of
actions the local government is undertaking or intends to
undertake to implement the policies and achieve the goals
and objectives of the housing element through the
administration of land use and development controls,
provision of regulatory concessions and incentives, and
the utilization of appropriate federal and state
financing and subsidy programs when available and the
utilization of moneys in a Low and Moderate Income
Housing Fund of an agency if the locality has established
a redevelopment project area pursuant to the Community
Redevelopment Law (Division 24 (commencing with Section
33000) of the Health and Safety Code) . In order to make
adequate provision for the housing needs of all economic
segments of the community, the program shall do all of
the following:
(1) Identify adequate sites which will be made
available through appropriate zoning and 'development
standards and with public services and facilities needed
to facilitate and encourage the development of a variety
of types of housing for all income levels, including
rental housing, factory-built housing, mobilehomes,
emergency shelters and transitional housing in order to
meet the community's housing goals as identified in
subdivision (b) .
4
(2) Assist in the development of adequate housing to
meet the needs of low- and moderate income households.
(3) Address and, where appropriate and legally
possible, remove governmental constraints to the
maintenance, improvement, and development of housing.
(4) Conserve and improve the condition of the existing
affordable housing stock.
(5) Promote housing opportunities for all persons
regardless of race, religion, sex, marital status,
ancestry, national origin, or color.
(6) Preserve for lower income households the assisted
housing developments identified pursuant to paragraph (8)
of subdivision (a) . The program for preservation of the
assisted housing developments shall utilize, to the
extent necessary, all available federal, state, and local
financing and subsidy programs identified in paragraph
(8) of subdivision (a) , except where a community has
other urgent needs for which alternative funding sources
are not available. The program may include strategies
that involve local regulation and technical assistance.
The program shall include an identification of the
agencies and officials responsible for the implementation
of the various actions and the means by which consistency
will be achieved with other general plan elements and
community goals. The local government shall make a
diligent effort to achieve public participation of all
economic segments of the community in the development of
the housing element, and the program shall describe this
effort.
(d) The analysis and program for preserving assisted
housing developments required by the amendments to this
section enacted by the Statues of 1989 shall be adopted
as an amendment to the housing element by January 1,
1992.
(e) Failure of thedepartment to review and report its
findings pursuant to Section 65585 to the local
government between January 1, 1992, and the next periodic
review and revision required by Section 65588, concerning
the housing element amendment required by the amendments
to this section by Statues of 1989, shall not be used as
a basis for allocation or denial of any housing
assistance administered pursuant to Part 2 (commencing
with Section 50400) of Division 31 of the Health and
Safety Code.
(Amended by Stats. 1984, Ch. 1691. Urgency; effective
October 1, 1984; Amended by Stats. 1986, Ch. 1383 ,
Amended by Stats. 1989, Ch. 1140, Amended by Stats. 1989,
Ch. 1451. )
Note: Stats. 1984, Ch. 1691, also reads:
SSC. 1. The Legislature finds and declares that because
of economic, physical, and mental conditions that are
5
beyond their control, thousands of individuals and
families in California are homeless. Churches, local
governments, and nonprofit organizations providing
assistance to the homeless have been overwhelmed by a new
class of homeless: families with children, individuals
with employable skills, and formerly middle-class
families and individuals with long work histories.
The programs provided bt the state, local, and federal
governments, and by private institutions, have been
unable to meet existing needs and further action is
necessary. The Legislature finds and declares that two
levels of housing assistance are needed: an emergency
fund to supplement temporary shelter programs, and a fund
to facilitate the preservation of existing housing and
the creation of new housing units affordable to very low
income households. It is in the public interest for the
State of California to provide this assistance.
The Legislature further finds and declares that there
is a need for more information on the numbers of homeless
and the causes of homelessness, and for systematic
exploration of more comprehensive solutions to the
problem. Both local and state government have a role to
play in identifying, understanding, and devising
solutions to the problem of homelessness.
Note: Stats. 1986, Ch. 1383, also reads:
SEC. 3. The amendments to paragraph (1) of subdivision
(c) of Section 65583 of the Government Code made by the
act adding this section during the 1986 Regular Session
of the Legislature shall require an identification of
sites for emergency shelters and transitional housing by
January 1, 1988, or by the next periodic review of a
housing element pursuant to Section 65588 of the
Government Code, whichever is later, in order to give
local governments adequate time to plan for, and to
assist in the development of, housing for homeless
persons, if it is determined that there is a need for
emergency shelter pursuant to paragraph (6) of
subdivision (a) of Section 65583 of the Government Code.
65584. (a) For purposes of subdivision (a) of Section
65583, the share of a city or county of the regional
housing needs includes that share of the housing need of
persons at all income levels within the area
significantly affected by a general plan of the city or
county. The distribution of regional housing needs
shall, based upon available data, take into consideration
market demand for housing, employment opportunities, the
availability of suitable sites and public facilities,
commuting patterns, type and tenure of housing need, the
loss of units contained in assisted housing developments,
as defined -in paragraph (8) of subdivision (a) of Section
6
65583, that changed to non-low-income use through
mortgage prepayment, subsidy contract expirations, or
termination of use restrictions, and the housing needs of
farmworkers. The distribution shall seek to reduce the
concentration of lower income households in cities or
counties which already have disproportionately high
proportions of lower income households. avoid further
impaction of localities with relatively high proportions
of lower income households. Based upon data provided by
the Department of Finance, in consultation with each
council of government, the Department of Housing and
Community Development shall determine the regional share
of the statewide housing need at least two years prior to
the second revision, and all subsequent revisions as
required pursuant to Section 65588. Based upon data
provided by the department relative to the statewide need
for housing, each council of governments shall determine
the existing and projected housing need for its region.
Within 30 days following notification of this
determination, the department shall ensure that this
determination is consistent with the statewide housing
need. The department may revise the determination of the
council of governments if necessary to obtain this
consistency. The appropriate council of governments
shall determine the share for each city or county
consistent with the criteria of this subdivision and with
the advice of the department subject to the procedure
established pursuant to subdivision (c) at least one year
prior to the second revision, and at five-year intervals
following the second revision pursuant to Section 65588.
The council of governments shall submit to the department
information regarding the assimRtions and methodology to
be used in allocating the regional housing need. As part
of the allocation of the regional housing need. the
council' of governments. or the department pursuant to
subdivision (b) . shall provide each city and county with
data describing the assumptions and methodology used in
calculating its share of the regional housing need. The
department shall submit to each council of governments
information regarding the assumptions and methodology to
be used in allocating the regional share of the statewide
housing need. As part of its determination of the
rgggional share of the statewide housing need, the
department shall provide each council of governments with
data describing the assumptions and methodoloav used in
calculating its share of the statewide housing need. The
councils of governments shall provide each city and
county with the department's information.
(b) For areas with no council of governments, the
department shall determine housing market areas and
define the regional housing need for cities and counties
within these areas pursuant to the provisions for the
7
�Y-0
distribution of regional housing needs in subdivision
.L41. Where the department determines that a city or
county possesses the capability and resources and has
agreed- to accept the responsibility, with respect to its
jurisdiction, for the identification and determination of
housing market areas and regional housing needs, the
department shall delegate this responsibility to the
cities and counties within these areas.
(c) (1) Within 90 days following a determination of a
council of governments pursuant to subdivision (a) , or
the department's determination pursuant to subdivision
(b) , a city or county may propose to revise the
determination of its share of the regional housing need
in accordance with the considerations set forth in
subdivision (a) . The Proposed revised share shall be
based upon available data and accepted planning
methodology, and supported by adequate documentation.
(2) Within 60 days after the time period for the
revision by the city or county, the council of
governments or the department, as the case may be, shall
accept the proposed revision, modify its earlier
determination. or indicate, based upon available data and
accepted planning methodology, why the proposed revision
is inconsistent with the regional housing need.
(A) If the council of governments or the department, as
the case may be does not accept the proposed revision
then the city or county shall have the right to reauest
a public hearing to review the determination within 30
days.
(B) The city or county shall be notified within 30 days
b4 certified mail return receipt requested of at least
one public hearing regarding the determination.
(C) The date of the hearing shall be at least 30 days
from the date of the notification.
(D) Before makina its final determination the council
of Governments or the department as the case may be.
shall consider comments, recommendations. available data.
accepted planning methodology and local aeoloaical and
topographic restraints on the production of housing.
(3) If the council of governments or the department
accepts the proposed revision or modifies its earlier
determination the city or county shall use that share.
If the council of governments or the department grant a
revised allocation pursuant to paragraph (1) the council
of governments or the department shall ensure that the
current total housing need is maintained If the council
of governments or department indicates that the proposed
revision is inconsistent with the regional housing need.
the city or county shall . use the share which was
originally determined by the council of governments or
the department.
(4) The determination of the council of governments or
8
the department. as the case may be. shall be subject to
judicial review pursuant to Section 1094.5 of the Code of
Civil Procedure.
(5) The council of governments or the department shall
reduce the share of regional housing needs of a county if
all of the following conditions are met:
(A) One or more cities within the county agree to
increase its share its share or their shares in an amount
which will make up for the reduction.
(B) The transfer of shares shall only occur between a
county and cities within that county.
(C) The county's share of low-income and very low
income housina shall be reduced only in proportion to the
amount by which the county's share of moderate- and above
moderate-income housing is reduced.
(D) The council of governments or the department.
whichever assigned the county's share. shall have
authority over the approval of the proposed reduction.
taking into consideration the criteria of subdivision (a)
of Section 65584.
(6) The housing element shall contain an analysis of
the factors and circumstances, with all supporting data,
justifying the revision. All materials and data used to
justify any revision shall be made available upon request
by any interested party within seven days upon payment of
reasonable costs of reproduction unless the costs are
waived due to economic hardship.
(d) (1) Except as provided in paragraph (2) , any
ordinance, policy, or standard of a city or county which
directly limits, by number, the building permits which
may be issued for residential construction, or which
limits for a set period of time the number of buildable
lots which may be developed for residential purposes,
shall not be a justification for a determination or a
reduction in the share of a city or county of the
regional housing need.
(2) Paragraph (1) does not apply to any city or county
which imposes a moratorium on residential construction
for a set period of time in order to preserve and protect
the public health and safety. If a moratorium is in
effect, the city or county shall, prior to a revision
pursuant to subdivision (c) , adopt findings which
specifically describe the threat to the public health and
safety and the reasons why construction of the number of
units specified as its share of the regional housing need
would prevent the .mitigation of that threat.
(e) Any authority to review and revise the share of a
city or county of the regional housing need granted under
this section shall not constitute authority to revise,
approve, or disapprove the manner in which the share of
the city or county of the , regional housing need is
implemented through its housing program.
9
zC
(f) A fee may be charged interested parties for any
additional costs caused by the amendments made to
subdivision (c) by Chapter 1684 of the Statutes of 1984
reducing from 45 to seven days the time within which
materials and data shall be made available to interested
parties.
(g) Determinations made by the department, a council of
governments, or a city or county pursuant to this section
are exempt from the provisions of the California
Environmental Quality Act, Division 13 (commencing with
Section 21000) of the Public Resources Code.
(Amended by Stats. 1984, Ch. 1684, Amended Stats. 1989,
Ch. 1451. Amended Stats. 1990, Ch. 1441)
65585. (a) In preparation of its housing element, each
city and county shall consider the guidelines adopted by
the department pursuant to Section 50459 of the Health
and Safety Code. Those guidelines shall be advisory to
each city or county in the preparation of its housing
element.
(b) At least 90 days prior to adoption of its housing
element, or at least 45 days prior to the adoption of an
amendment to this element, the planning agency shall
submit a draft element or draft amendment to the
department. The department shall review the draft and
report its written findings to the planning agency within
90 days of its receipt of the draft in the case of an
adoption or within 45 days of its receipt in the case of
a draft amendment.
,jc) In the preparation of its findings, the department
may consult with any public agency, group. or person.
The department shall receive and consider any written
comments from any public agency. group, or person
regarding the draft or adopted element or amendment under
review.
(d) In its written findings, the department shall
determine whether the draft element or draft amendment
substantially complies with the requirements of this
article.
(e) Prior to the adoption of its draft element or
draft amendment, the legislative body shall consider the
findings made by the department. If the department's
findings are not available within the time limits set by
this section, the legislative body may act without them.
(f) If the department finds that the draft element or
draft amendment does not substantially comply with the
requirements of this article the legislative body shall
take one of the following actions:
(1) Chance the draft element or draft amendment to
substantially comply with the recuirements of this
article.
(2) Adopt the draft element or draft amendment without
10
chances. The legislative body shall include in its
resolution of adoption written findings which explain the
reasons the legislative body believes that the draft
element or draft amendment substantially complies with
the requirements of this article despite the findings o
the department.
(g) Promptly following the adoption of its element or
amendment. the planning agency shall submit a copy to the
department.
fh) The department shall. within 120 days. review
adopted housing elements or amendments and report its
findings to the planning agency.
(Amended by Stats. 1983, Ch. 1250 [effective January 1,
1984] ; Stats. 1984, Ch. 1009, Amended Stats. 1990, Ch.
1441)
65586. Local governments shall conform their housing
elements to the provisions of this article on or before
October 1, 1981. Jurisdictions with housing elements
adopted before October 1, 1981, in conformity with the
housing element guidelines adopted by the Department of
Housing and Community Development on December 7, 1977,
and located in Subchapter 3 (commencing with Section
6300) of Chapter 6 of Part 1 of Title 25 of the
California Administrative Code [repealed in 1982] , shall
be deemed in compliance with this article as of its
effective date. A locality with a housing element found
to be adequate by the department before October 1, 1981,
shall be deemed in conformity with these guidelines.
(Added by Stats. 1980, Ch. 1143 . )
65587. (a) Each city, county, or city and county shall
bring its housing element, as required by subdivision (c)
of Section 65302, into conformity with the requirements
of this article on or before October 1, 1981, and the
deadlines set by section 65588. Except as specifically
provided in subdivision (b) of Section 65361. the
Director of Planning and Research shall not grant an
extension of time from these requirements.
(b) Any action brought by any interested party to
review the conformity with the provisions of this article
of any housing element or portion thereof or revision
thereto shall be brought pursuant to Section 1085 of the
Code of Civil Procedure; the court's review of compliance
with the provisions of this article shall extend to
whether the housing element or portion thereof or
revision thereto substantially complies with the
requirements of this article.
(c) If a court finds that an action of a city, county,
or city and county, which is required to be consistent
with its general plan, does not comply with its housing
element, the city, county, or city and county shall bring
11
102
its action into compliance within 60 days. However the
court shall retain jurisdiction through out the period
for compliance to enforce its decision. Upon the court's
determination that the 60-day period for compliance would
place an undue hardship on the city, county, or city and
county, the court may extend the time period for
compliance by an addition 60 days.
(Amended by Stats. 1984, Ch. 1009. Amended Stats. 1990,
Ch. 1441)
Note: Stats. 1984, Ch. 1009, also reads:
SEC. 44. It is the intent of the Legislature that the
term "substantially complies, " as used in subdivision (b)
of Section .65587, be given the same interpretation as was
given that term by the court in Camp v. Board of
Supervisors, 123 Cal. App. 3d. 334, 348, [176 Cal. Rptr.
620, 629) . ,
65587.1. (a) The Legislature finds and declares that
local policies and programs which increase housing
opportunities through a tax-exempt revenue bond program
or through a requirement that the approval of a housing
related project be tied to the provision of assistance
for housing are consistent with the intent of this
article. The Legislature further finds and declares that
actions which have the effect of impeding or halting
such policies and programs or the direct production of
housing run contrary to the goals of increased housing
opportunities and balanced commercial and residential
development embodied in this article:
(b) Not withstanding any other provision of law,
neither a mortgage revenue bond program subject to
subdivision (b) of Section 52053.5 of. the Health and
Safety Code nor a local approval, made prior to May 1,
1983, of a housing related project shall be invalidated
due to the failure or alleged failure of a city and
county to comply with this article, subdivision (c) of
Section 65302 of the Government Code, or any regulations
or guidelines adopted pursuant thereto, or any other
provision of law require consistency with the housing
element of a local general plan. For purposes of this
section, a "housing related project" means (a) a
residential project or (b) a nonresidential project, the
local approval of which was conditioned upon the
nonresidential developer (1). developing or rehabilitating
or causing to be developed or rehabilitated housing
units, or (2) providing funds for the development or
rehabilitation of housing units, or (3) investing in a
mortgage revenue bond program subject to subdivision (b)
of Section 52053 .5 of the Health and Safety Code, under
a formula or guidelines adopted by the planning
commission or local governing body of the city and
12
county. For purposes of this section, "housing related
project" shall not include a project, the construction or
development of which requires -either the demolition or
conversion of low- or moderate-rental residential units
and local approval of which does not provide for the
replacement of such units and for the maintenance in such
units of rents affordable for low- and moderate-income
persons for a period of not less than 20 years.
(Added by Stats. 1982, Ch. 312. Effective June 28,
1982. )
65588. (a) Each local government shall review its
housing element as frequently as appropriate to evaluate
all of the following:
(1) The appropriateness of the housing goals,
objectives, and policies in contributing to the
attainment of the state housing goal.
(2) The effectiveness of the housing element in
attainment of the community's housing goals and
objectives.
(3) The progress of the city, county, or city and
county in implementation of the housing element.
(b) The housing element shall be revised as
appropriate, but not less than every five years, to
reflect the results of this periodic review.
In order to facilitate effective review by the
department of housing elements, local governments
following shall prepare and adopt the first two revisions
of their housing elements no later than the dates
specified in the following schedule, notwithstanding the
date of adoption of the housing elements in existence on
the effective date of the act which amended this section
during the 1983-84 session of the Legislature.
(1) Local governments within the regional jurisdiction
of the Southern California Association of Governments:
July 1, 1984, for the first revision and July 1, 1989,
for the second revision.
(2) Local governments within the regional jurisdiction
of the Association of Bay Area Governments: January 1,
1985, for the first revision, and July 1, 1990, for the
second revision.
(3) Local governments within the regional jurisdiction
of the San Diego Association of Governments, the Council
of Fresno County Governments, the Kern County Council of
Governments, the Sacramento Council of Governments, and
the Association of Monterey Bay Area Governments: July 1,
1985, for the first revision, and July 1, 1991, for the
second revision.
(4) All other local governments: January 1, 1986, for
the first revision, and July 1, 1992, for the second
revision.
(5) Subsequent revisions shall be completed not less
13
Y11-zz
often than at five-year intervals following the second
revision.
(c) The review and revision of housing elements
required by this section shall take into account any low-
or moderate-income housing which has been provided or
required pursuant to Section 65590.
(d) The review pursuant to subdivision (c) shall
include, but need not be limited to, the following:
(1) The number of new housing units approved for
construction within the coastal zone after January 1,
1992.
(2) The number of housing units for persons and
families of low income or moderate income, as defined in
Section 50093 of the Health and Safety Code, required to
be provided in new housing developments either within the
coastal zone or within three miles of the coastal zone
pursuant to- Section 65590.
(3) The number of existing residential dwelling units
occupied by persons and families of low or moderate
income, as defined in Section 50093 of the Health and
Safety Code, that have been authorized to be demolished
or converted since January 1, 1982, in the Coastal zone.
(4) The number of residential dwelling units for
persons and families of low or moderate income, as
defined in Section 50093 of the Health and Safety Code,
that have been required for replacement or authorized to
be converted or demolished as identified in paragraph
(3) . The location of the replacement units, either
onsite, elsewhere within the locality's jurisdiction
within the coastal zone, or within three miles of the
coastal zone within the locality's jurisdiction, shall be
designated in the review.
(Amended by Stats. 1984, Ch. 208. Effective June 20,
1984)
65569. (a) Nothing in this article shall require a city,
county, or city and county to do any of the following:
(1) Expend local revenues for the construction of
housing, housing, housing subsidies, or land acquisition.
(2) Disapprove any residential development which is
consistent with the general plan.
(b) Nothing in this article shall be construed to be a
grant of authority or a repeal of any authority which may
exist of a local government to impose rent controls or
restrictions on the sale of property.
(c) Nothing in this article shall be construed to be a
grant of authority or a repeal of any authority which may
exist of a local government with respect to measures that
may be undertaken or required by a local government to be
undertaken to implement the housing element of the local
general plan.
(d) The provisions of this article shall be construed
14
consistent with, and in promotion of, the statewide goal
of a sufficient supply of decent housing to meet the
needs of all Californians.
_ (Added by Stats. 1980, Ch. 1143. )
65589.3. In any action filed on or after January 1. 1991,
taken to challenge the validity of a housing element,
there shall be a rebuttable presumption of the validity
of the element or amendment if, pursuant to Section
65585 the department has found that the element or
amendment substantially complies with the requirements of
this article.
(Added by Stats. 1990. Ch. 1441)
65589.5. (a) The Legislature finds all of the following:
(1) The Lack of affordable housing is a critical
problem which threatens the economic. environmental , and
social quality of life in California.
(2) California housing has become the most expensive in
the nation The excessive cost of the state' s housing
supply is partially caused by activities and policies of
many local governments which limit the approval of
affordable housing increase the cost of land for
affordable housing and require that high fees and
exactions be paid by producers of potentially affordable
housing.
(3) Among the consequences of these actions are
discrimination against low-income and minority
households lack of housing to support employment growth,
imbalance in lobs and housing. reduced mobility. urban
sprawl, excessive commuting, and air quality
deterioration.
(4) Many local governments do not sive adequate
attention to the economic. environmental , and social
costs of decisions which result in disapproval of
affordable housing projects reduction in density of
affordable housing projects. and excessive standards for
affordable housing projects.
(b) It is the policy the state that a local government
not reject or make infeasible affordable housing
developments which contribute to meeting the housing need
determined pursuant to this article without a throuah
analysis of the economic. social , and environmental
effects of the action and without meeting the provisions
of subdivision (c) .
(c) The Legislature also recognizes that premature and
unnecessary development of agriculture lands to urban
uses continues to have adverse effects on the
availability of such lands for food and fiber production
and on the economy of the state. Furthermore, it is the
policy of the state that development should be guided
away from prime agricultural lands: therefore, in
implementing this section local jurisdictions should
15
11of-23
encourage, to the maximum extent practicable, infilling
existing urban areas.
(d) A local agency shall not disapprove a housing
development project affordable to low- and moderate-
income households or condition approval in a manner which
renders the project infeasible for development for use of
low- and moderate-income households unless it finds,
based upon substantial evidence: one of the following:
(l) The iurisdiction has adopted a housing element
pursuant to this article and the development proiect is
not needed for the iurisdiction to meet its share of the
regional housing need of low-income housing.
(2) The development prosect as proposed would have a
specific. adverse impact upon the public health or
safety. and there is no feasible method to satisfactory
mitigate or avoid the specific adverse impact without
rendering the development unaffordable to low- and
moderate-income households.
(3) The denial of the proiect or imposition of
conditions is required in order to comply with specific
state or federal law, and there is no feasible method to
comply without rendering the development unaffordable to
low- and moderate-income households,
(4) Approval of the development proiect would increase
the concentration of lower income households in a
neighborhood that already has a disproportionately hiah
number of lower income households and there is no
feasible method of approving the development at a
different site, including those sites identified pursuant
to paragraph (1) of subdivision (c) of Section 65583 ,
without rendering the development unaffordable to low-
and moderate-income households.
(5) The development project is proposed on land zoned
for agricultural or resource preservation which is
surrounded on at least two sides by land being used for
agricultural or resources preservation purposes, or which
does not have adequate water or wastewater facilities to
serve the project.
(6) The development proiect is inconsistent with the
iurisdiction's general plan land use designation as
specified in any element of the general plan as it
existed on the date the application was deemed complete,
and the jurisdiction has adopted a housing element
pursuant to this article.
(e) Nothing in this section shall be construed to
relieve the local agency from complvinca with the
provisions of the Congestion Management Program required
by Chapter 2.6 (commencing with Section 65088) of
Division 1 of Title 7 of the Government Code or the
provisions of the California Coastal Act, Division 20
(commencing with Section 300001 of the Public Resources
Code. Neither shall anything in this section be
construed to relieve the local agency from making one or
16
more of the findings required pursuant to Section 21081
of the Public Resources Code or otherwise complying with
the Environmental Quality Act, Division 13 (commenciDa
with Section 21000) of the Public Resources Code.
(f) Nothing in this section shall be construed to
Prohibit a local agency from requiring the development
nroiect to comply with development standards and policies
appropriate to and consistent with meeting the quantified
objectives relative to the development of housing, as
required in the housing element pursuant to subdivision
(b) of Section 65583. Nor shall anythina in this section
be construed to prohibit a local agency from imposing
fees and other exactions otherwise authorized by law
which are essential to provide necessary public services
and facilities to the development proiect.
(g) This section shall be applicable to charter cities,
because the Legislature finds that the lack of affordable
housing is a critical statewide problem.
(h) The following definitions apply for the purposes of
this section:
(1) "Feasible" means capable of being accomplished in
a successful manner within a reasonable period of time
taking into account economic, environmental, social, and
technological factors.
(2) "Affordable to low- and moderate-income households"
means at least 20 percent of the total units shall be
sold or rented to lower income households. as defined in
Section 50079.5 of the Health and Safety Code, and the
remaining units shall be sold or rented to either lower
income households or persons and families of moderate
income as defined in Section 50093 of the Health and
Safety Code. Housing units targeted for lower income
households shall be made available at a monthly housing
cost that does not exceed 30 percent of 60 percent of
area median income with adjustments for household size
made in accordance with adjustment factors on which the
lower income eliaibility limits are based. Housing units
targeted for persons and families of moderate income
shall be made available at a monthly housing cost that
does not exceed 30 percent of 100 percent of area median
income with adjustments for household size made in
accordance with the adjustment factors on which the
moderate income eliaibility limits are based. "Area
median income" shall mean are median income as
periodically established by the Department of Housing and
Community Develonment pursuant to Section 50093 of the
Health and Safety Code. The developer shall provide
sufficient legal commitments to ensure continued
availability of units for the lower income households in
accordance with the provisions of this subdivision for 30
years.
(3) "Neighborhood" means a planning area commonly
identified as such in a community's planning documents.
17
.o� Z�
and identified as a neighborhood by the individuals
residing and working within the neighborhood.
Documentation demonstrating that the area meets the
definition of neighborhood may include a map prepared for
planning purposes which lists the name and boundaries of
the neighborhood.
(i) If any city. county. or city and county denies
approval or imposes restrictions. including a reduction
of allowable densities or the percentage of a lot which
may be occupied by a building or structure under the
applicable planning and zoning in force at the time the
application is deemed complete pursuant to Section 65943 ,
which have a substantial adverse effect on the viability
or affordability of a housing development affordable to
low- and moderate-income households, and the denial of
the development or the imposition of restrictions on the
development is the subiect of a court action which
challenges the denial. then the burden of proof shall be
on the local legislative body to show that its decision
is consistent with the findings as described in
subdivisions (c) .
L7.1 When a proposed housing development project
complies with the applicable general plan, zoning,
development policies in effect at the time that the
housing development project's application is determined
to be complete, but the local agency proposes to
disapprove the project or to approve it upon the
condition that the project be developed at a lower
density, the local agency shall base its decision
regarding the proposed housing development project upon
written findings supported by substantial evidence on the
record that both of the following conditions exist:
JJU The housing development project would have a
specific adverse impact upon the public health or safety
unless the project is disapproved or approved upon the
condition that the project be developed at a lower
density.
LU There is no feasible method to satisfactorily
mitigate or avoid the adverse impact identified pursuant
to paragraph (l) , other than the disapproval of the
housing development project or the approval of the
project upon the condition that it be developed at a
lower density.
(Added by Stats. 1982, Ch. 1438, Amended by Stats.
1990, Ch. 1439)
65589.6. In any action taken to challenge the validity
of a decision by a city, county, or city and county to
disapprove a project or approve a project upon the
condition that it be developed at a lower density
pursuant to Section 65589.5, the city, county, or city
and county shall bear the burden of proof that its
decision has conformed to all of the conditions specified
18
oft
in Section 65589.5.
(Added by Stats. 1984, Ch. 1104. )
65589.8. A local government which adopts a requirement
in its housing element that a housing development contain
a fixed percentage of affordable housing units, shall
permit a developer to satisfy all or portion or that
requirement by constructing rental housing at affordable
monthly rents, as determined by local government.
Nothing in this section shall be construed to expand or
contract the authority of a local government to adopt an
ordinance, charter amendment, or policy requiring that
any housing development contain a fixed percentage of
affordable housing units.
(Added by Stats. 1983, Ch. 787. )
Health and Safety Code
50459. (a) The department may adopt, and from time to
time revise, guidelines for the preparation of housing
elements required by Section 65302 and Article 10. 6
(commencing with Section 65580) of Chapter 3 of Division
1 of Title 7 of the Government Code.
u The department shall review housing elements and
amendments for substantial compliance with Article 10. 6
(commencing with Section 65580) of Chapter 3 of Division
1 of Title 7 of the Government Code and report its
findings pursuant to Section 65585 of the Government
Code.
(c) On or before December 31, 1991, and annually
thereafter, the department shall report to the
Legislature on the status of housing elements and the
extent to which they comply with the requirements of
Article 10.6 (commencing with Section 65580) of Chapter
3 of Division 1 of Title 7 of the Government Code. The
department shall also make this report available to any
other public agency, group, or person who requests a
copy.
(d) The department may, in connection with any loan or
grant application submitted to the agency, require
submission to the department fore review of any housing
element and any local housing assistance plan adopted
pursuant to the Housing and Community Development Act of
1974 (Public Law 93-383)(42 U.S.C.A. Section 5301 et.
seq. ]
(Added by Stats. 1977, Ch. 610, Amended by Stats. 1983 ,
Ch. 101, Amended by Stats. 1985, Ch. 675, Amended by
Stats. 1990, Ch. 1441. )
2/26/91
19
MEETING AGENQA
MEMORANDUM
DATE 6-4- a REM
TO: Honorable Mayor and City Council
FROM: Arnold Jonas, Community Development Director b
DATE: August 4, 1992
SUBJECT: Regional Housing Needs Options
(See #4 for Recommendation)
Tonight's Council agenda, item #4, presents the Planning Commission's
recommendation that the General Plan Housing Element update incorporate new
housing goals based upon current city policy of an annual 1% growth rate. This
recommendation conflicts with the share of state approved housing allocation
numbers assigned to the city by the Council of Governments.
As an aid to the Council in understanding the range of alternative actions
available to you this evening, please consider the following.
1. Unqualified acceptance of the state numbers. This is the only way to
assure state acceptance of the revised Housing Element, but would be
inconsistent with adopted policy contained in other sections of our
General Plan.
2. Outright rejection of the state numbers. This is essentially the action
recommended by the Planning Commission. The result would be a Housing
Element that state staff has already indicated would be rejected. We would
then have an incomplete General Plan which could expose the city to
lawsuit or other action to attempt :to force compliance with the state
numbers.
3. Qualified acceptance of the state numbers. An attempt could be made to
both recognize the state numbers while retaining the 1% growth cap,
perhaps relying on expanded arguments concerning resource constraints or
exemptions for affordable housing. Concurrently, we could pursue
legislative relief by backing League and/or CSAC activities, contacting
our own legislators, etc. This alternative would appear to strive for the
best of both worlds, state compliance without compromising local policies,
but would likely be difficult to achieve and still could be subject to
state rejection because of lack of unqualified acceptance of the state
numbers.
4. Defer a decision pending resolution of the work now underway to update
other elements of the General Plan, and allow possible legislative action
to establish a more realistic process for determining fair share housing
numbers. This alternative has the advantage of allowing a decision on the
Housing Element to be made in the context of a completely integrated
General Plan, which would delineate the best policy options for the city.
By continuing to analyze our options in this fashion we would not have met
the state established deadline for updating of the element (which has
already passed) . However, given that we are actively pursuing the update,
that the large majority of California cities are not in compliance with
the Housing Element legislation, and there are no specific penalties for
not conforming with the deadline, possible adverse results of this
approach appear minimal. Consequently, this alternative appears to fit
best with the long-term interests of the city and is the staff recommended
course of action this evening.
❑ Da tmActkmKMM.MX
ClM
RECEIVE ® c� CDR
CAO
9P.00
p'm• ACAO ❑ FIRBCHW
AUG 41992 ATMECY FwD1R
[CLEMOM POLKZCFL
❑ MCMI:� ❑ REC DuL
CITU CLERK C FILE LRILDIR.
SAN LUIS OBISPO,CA La� a ��